A time for open debate

Companies do not like to feel like they are unpaid tax collectors for the government

By Michelle Perry | Published 14:48, 20 October 11

OpenDebateThere were numerous responses to ActionAid’s report earlier this month that 98 of the FTSE 100 companies use tax havens located as far as the Cayman’s to islands closer to home like Jersey. What wasn’t surprising were the polarised views. Tax issues rarely produce indifference.

No public defence was made by the influential, but media-shy, group of 100 finance directors. But the group did respond to me by email (not in person) to say that the Hundred Group are “absolutely committed to acting with integrity and transparency in all tax matters”.

The statement went on to say that the UK’s top companies continue “to make a substantial contribution to the UK public finances”. It quoted the annual study of total tax contribution – a survey set up six years ago to counter criticism of corporate tax avoidance. The survey shows that the Hundred Group member companies contributed £56.8 billion (or 11.9 percent of all government tax receipts) in the year to 31 March 2010.

It’s true, of course, business does contribute significant sums in taxes to government. However the taxes cited in this report tend to be a combination of those borne and those collected.

It’s important not to blur the lines here. It’s this very point that many companies dislike. They do not like to feel that they are working as an unpaid, unglorified tax collectors for a government whatever its colour.

But in reaction to ActionAid’s research I do not feel this is a valid response. In fact it does not respond to the research, but redirects attention and shirks the issue.

We can not have a debate about tax or tax havens – their validity or not – until these companies and more to the point these finance chief acknowledge freely and publicly that they use them and why they use them. It may turn out that these reasons are wholly valid but until they state them, we cannot have a grown up debate about this burning issue.

We need to have this debate so that the companies can regain a value in the eyes of society and until we do large corporates will continue to be seen, wrongly, by a large majority of the British public, as a parasite of the taxpayer.

This is the perfect opportunity to speak openly and freely on these matters.

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